Private equity firm Golden Gate Capital has agreed to buy business software maker Geac Computer for around US$1 billion, the companies announced Monday. Golden Gate Capital plans to break Geac into pieces, with Geac's ERP (enterprise resource planning) software changing hands and becoming the property of another Golden Gate Capital-funded company, Infor Global Solutions.
San Francisco-based Golden Gate Capital will pay US$11.10 per share for Geac, a 27 percent premium on Geac's Friday closing price on the Nasdaq stock exchange (ticker symbol: GEAC). The companies expect the deal to close in early 2006.
Geac, based in Markham, Ontario, bills its products as "software for the CFO." The company had income of US$77 million last year on revenue of US$444.4 million, mostly from the enterprise applications business that Infor is acquiring. That business drove 80 percent of Geac's revenue last year, the company said in its annual report.
Infor is becoming a formidable player in the ERP market with a portfolio built through acquisitions. The private company, with headquarters in Alpharetta, Georgia, focuses tightly on the midmarket manufacturing and distribution industry, selling mainly to customers with less than US$250 million in annual revenue. The software lines it will pick up from Geac include System21, RatioPlan, Runtime and Streamline.
Before Geac, Infor's largest acquisition was its purchase earlier this year of Mapics, for around US$350 million in stock. Infor has 2,300 employees worldwide and 18,000 customers.
Golden Gate Capital plans to form two new business groups around Geac's remaining assets, which will be held by a new company with a chief executive office to be named prior to the transaction's closing. A financial applications unit will focus on Geac's Enterprise Server, SmartStream, Anael, Extensity and Comshare products, while an industry-specific applications group concentrates on serving industries, including libraries, local governments and restaurants.